How do you earn interest on your Bitcoin?
In this article I will explain, how you can earn interest on your Bitcoins and some of the major cryptocurrencies. There will be a few things you will need.
- Major CryptoCurrenceis such as Bitcoin, Ethereum, Litecoin, Ethereum Classic and just a few more popular coins. You can even fund with USD that is in your account.
- You will need a Bitfinex account, if you don’t have a Bitfinex account sign up here.
How does it work?
Basically Bitfinex gives different options to trading such as, Exchange Trading and Margin Trading. Lets talk about some of these options.
Exchange Trading – is pretty self explanatory. Lets take a Pair BTC/USD for example. You as the trader have 1BTC to sell to USD for X amount. You would initiate an order on the exchange option to sell your 1BTC for X amount. When the order is filled you will get X Amount in USD. Quite simple yes? To keep it simple its buying and selling and vise versa with your desired price. However the price you ask for may or may not be filled depending how low your bidding or how high your asking.
Margin Trading – is pretty similiar to exchange trading however you have the option of leverage. Leverage allows you to trade without putting up the full amount, but instead a margin amount is required. Bitfinex lets you leverage 3:1 which means if you wanted to trade with 3BTC, a required equity of 1BTC is required to make a purchase. Bitfinex allows up to 3.3:1 leverage or 33% equity of the trade amount. Which means traders only need 33% of their trade.
Why does this matter?
Its important to understand where your funds are going and how its being used. That being said what is your money doing? Bitfinex has another option called: Margin Funding.
Margin Funding – is a short-term loan that traders can use at an agreed rate of interest. It works well with Margin Trading so if your not a trader this may be the option for you. Bitfinex allows various cryptocurrencies to fund. You can choose your offers/interest rate, duration and the amount as desired.
When your offer is taken by a trader, the money in your funding wallet will be used by the trader to buy or sell. When the trade is complete or closing of the position, the money that were used will be returned to your wallet. The interest is paid to the funding provider in the same currency that was provided. So if you lent USD your interest will be paid in USD. Same goes along with the different cryptos that you fund.
How to start funding and earning interest daily?
So after you’ve got your cryptocurrencies that you want to earn with and signed up with Bitfinex, you are ready to start!!
Below is a video deminstation on how its done.